Given The Risks, Is Crypto A Good Hedge Against Inflation?

Germans are expected to pay twenty to fifty percent higher prices on retail purchases. The price of gasoline is approaching $7.00 per gallon in California.

I just paid 100 euros to fill up my Volkswagen Polo.

Naturally, people search for ways to protect their wealth as higher and higher prices erode it. Some will look to crypto.

But is crypto the best way to protect yourself against inflation?

Leading Countries to Roll out CBDCs means Cryptocurrency is Potentially a Risk

In a previous article, I noted that cryptocurrencies were risky ways to protect against inflation because they were overvalued and speculative. But cryptocurrency might also be high-risk because governments have the power to ban them–along with cash–to force citizens to use central bank digital currencies.

All of the G20 countries are planning on rolling out CBDCs, and the possibility remains that they will ban cryptocurrencies and cash to force their citizens to use them. In fact, the Chinese already have.

You may think your cryptocurrency is safe from a ban because you have it on a hard wallet. You’re right–but only in part.

But if a blanket-wide ban is issued, people will think twice about transacting with you if you want to exchange your cryptocurrency for something else later on. In that case, your cryptocurrency is nothing but data on a thumb drive.

Unless, that is, you decide to move somewhere where it is legal. But how many people will move to the other side of Timbuktu just to exchange their crypto?

You also might think that cryptocurrency will never be banned.

Back in the Great Depression, President Franklin Roosevelt robbed all the gold depositors when it suited him. So the legal precedent exists for confiscation, and many people will just hand over their crypto to avoid running afoul of the government.

The Question to Ask Right Now: How Much Do You Trust Your Government?

When your country’s justice system is rotten and corrupt like ours, and prosecutors can file for as many continuances as they want so your only options are pleading guilty or going bankrupt, most people won’t take a chance with something illegal. So if confiscation starts, expect most people to just fall in line.

In closing, the sad reality is that there may be no effective way to protect your wealth from inflation. Traditionally, in times like these, you would put your wealth in defensive stocks, an interest-bearing savings account, property, or another safe investment.

But when the state has complete oversight and control over your money, it can implement any fiscal policies it wants and force you to come along for the ride. That means no moving of your money into cryptocurrency, stocks, or anything else if some apparatchik says you can’t.

Once we are using CBDCs, all money is the state’s, and it won’t matter how we invest it, because it can all be taken away by someone coldly entering a command into a computer.

In cases like these, it isn’t a matter of hedging against inflation; it’s about hiding your wealth in a place where it retains its value until the insanity passes.

——–

Is all this inflation talk and worry about government overreach causing you anxiety? Have a look at how NFTs are making an impact in the world of mental health.

If that doesn’t help, maybe it’s time to “eat, drink, and be merry”–but in the Metaverse instead. REad up on how we’re Looking Ahead to the Metaverse Bar Crawl.

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